Universal and Reliance unveil mobile music deal

MUMBAI, India -- Universal Music Group and India's Reliance Communications announced a mobile phone music distribution deal Wednesday, part of Universal's drive to ramp up digital revenues as physical sales wane.

Reliance will offer music downloads, ringtones, caller tunes and streaming radio of Universal's content for monthly subscription rates of $0.54 to $2.14.

The deal gives Universal access to Reliance's 110 million mobile customers in the world's fastest growing mobile phone market.

Reliance hopes the ability to distribute over 300,000 songs from more than 3,500 of Universal's international artists will give it a competitive edge as India prepares for the roll out high-speed third-generation networks.

Reliance Communications spent $1.8 billion to buy 3G spectrum in April. If the government allocates that spectrum by September, as planned, the company should have its 3G network running by early next year, Reliance Communications president Mahesh Prasad said.

Universal has similar arrangements in about 22 other countries, including the U.K., Singapore, Malaysia and France, said Rob Wells, Universal Music's senior vice president for digital operations.

"In markets where we've seen huge declines in the physical business, it ramps up our digital revenues significantly," said Sandy Monteiro, president of Universal Music's South East Asia operations.

After partnering with SingTel, for example, Universal Music's digital revenues in Singapore shot up from 10 percent to 50 percent of the total, he said.

Music downloading has been slow to come to India, where piracy is rampant. Nokia also has a music download service in India.